Rich Habits Podcast - Episode 149: Fixing the Hidden Hangover of Holiday Debt

Hosts: Austin Hankwitz and Robert Croak
Release Date: December 22, 2025

Episode Overview

In this episode, Austin and Robert tackle the all-too-common problem of the “holiday debt hangover”—the burst of credit card debt many people face every January after a season of generous gift-giving, travel, and celebrations. They outline practical strategies to dig out of debt quickly, share mindset shifts to prevent repeating the same mistakes next year, and field listener Q&A on related personal finance dilemmas. The tone throughout is candid, encouraging, and actionable, blending hard financial truths with personal anecdotes and empathy.

Key Discussion Points & Insights

The True Cost of Holiday Debt

• [01:41] Robert: “You just had a great holiday season… And now you’re staring at credit card statements that make you want to throw up.”
• The average American adds around $2,000 in holiday debt, with some racking up much more.
• The steep interest rates (often 20–30%) mean that making only minimum payments of $50/month could take 6 years to pay off that $2,000—costing an extra $1,500+ in interest.
• [03:28] Austin: "Broke people pay interest. Wealthy people earn it."

Psychological Impact

• [04:05] Robert: “High interest debt creates stress. It sits in the back of your mind… You feel guilty every time you spend money on anything.”
• Holiday debt is optional and results from choices and habits, not inevitability.

Step-by-Step: Recovering from Holiday Debt

1. Stop the Bleeding

• [04:44] Austin: “No more spending on credit cards. Not a single dollar. If it’s not in your checking account, you can’t afford it.”
  • Adopt a "debt recovery" mode for 30–90 days: only spend what’s available, based on your actual checking account, not future income or credit.

2. Prioritize Debt Repayment

• [05:43] Robert: Introduces debt repayment strategies:
  • Debt Avalanche: Pay off high-interest debts first to save the most money overall.
  • Debt Snowball: Pay off smallest balances first to build psychological momentum.
• [06:25] Austin: "Do whatever you gotta do to get out of debt—that is what's most important."

3. 30-Day No-Spend Challenge

• [07:31] Austin: “For the next 30 days…spend money on only the absolute essentials: rent, groceries, utilities, gas, and minimum debt payments. Everything else is off the table.”
• Robert: “The average American spends $300–400 a month just on restaurants. Cut that out and you have $300 to throw at that debt immediately.”
  • Eliminates waste, breaks spending habits, and redefines what's essential.
  • [09:03] Robert: “You survived without it. You didn’t go have the $17 avocado toast… but you were fine eating scrambled eggs at home.”

Mindset Shifts to Prevent Future Debt

Common Causes of Holiday Debt

• No budget:

  • [11:09] Robert: “You winged it and hoped it worked out, and it didn’t.”
  • Solution: Set a budget, break it down per person, and stick to it.

• Social Pressure & Obligation:

  • [11:50] Austin: “You spent money you didn’t have to avoid disappointing people.”
  • Solution: Have open conversations, set expectations for smaller gifts or Secret Santas early.

• Equating Spending with Love & Celebration:

  • [12:43] Robert: “Feelings fade, and debt doesn’t… Love isn’t measured in dollars.”
  • Opt for quality time, affordable experiences, or homemade gifts.

• Deserving to Splurge:

  • [13:31] Austin: “Treating yourself is fine, but going into debt to treat yourself is not really treating yourself. It’s stealing from your future self.”

The Prevention Playbook for Next Season

• Open a dedicated holiday savings account starting in February
• Set up automated monthly transfers to reach your budget by December
• [15:22] Robert: “Track your spending in real time… Don’t wait until January to realize you overspent.”

Notable Quotes & Memorable Moments

• [03:28] Austin: “Broke people pay interest. Wealthy people earn it.”
• [11:09] Robert: “You winged it and hoped it worked out, and it didn’t.”
• [12:43] Robert: “Feelings fade, and debt doesn’t. Love isn’t measured in dollars.”
• [13:31] Austin: “Going into debt to treat yourself is not really treating yourself. It’s stealing from your future self.”
• [16:49] Robert: “Broke people react and wealthy people forecast.”
• [17:09] Austin: “Don’t be reacting to this mountain of credit card debt. Forecast ahead of time so that this does not happen in the future.”

Listener Q&A (Select Highlights)

1. Buying a Beach House with a Recent Bonus

[18:33–23:56]

• Listener earns a high income and considers buying a Florida beach house as a future move and rental.
• Robert’s take: Be cautious, avoid overleveraging, consider off-water properties to minimize risk; don’t let dreams of a vacation home jeopardize your financial position.
• Austin’s take: “If you’re risk averse and only going to visit a few weeks a year—just rent. Save yourself the headache, and preserve your simple financial life.”

2. What To Do With a Lump-Sum Settlement at Age 23

[23:59–28:27]

• Listener has ~$150K from an accident settlement but makes $30K/year, still living at home.
• Austin’s advice: Don’t rush into property or risky business investment. Focus on increasing your income and invest the lump sum safely, perhaps with help from a financial advisor.
• Robert’s advice: “Pretend it [the $100K] does not exist. Invest in the S&P 500 and let it grow for decades. Don’t nibble away at it or get pulled into get-rich-quick schemes.”

3. College Student’s Arbitrage Idea: Taking Loans to Invest

[30:08–31:57]

• Listener considers taking out subsidized student loans, investing the funds, then paying loans back after graduation.
• Austin: “To my understanding, [that] is illegal. Do not do that.”
• Robert: “Shortcuts generally don’t work out. Learn a skill, get a side hustle—make money legally.”

Actionable Takeaways

• STOP the debt cycle immediately: Spend only what you already have, not what you can borrow.
• Prioritize debt repayments: Use either the avalanche (high-interest first) or snowball (smallest balance first) method—consistency is more important than method.
• Do a 30-day No-Spend Challenge: Radical, but effective in breaking old habits and freeing up cash.
• Shift your mindset: Budget intentionally, resist social pressure, decouple spending from affection, and don’t self-sabotage with rationalizations.
• Forecast, don’t react: Plan ahead now for guilt-free holidays a year from now by saving all year.

Memorable Segment Timestamps

• The cost of holiday debt (and how long it lingers): [02:54]–[04:05]
• Debt repayment methods explained: [05:43]–[07:12]
• No-Spend January details: [07:31]–[10:21]
• Top reasons for recurring holiday debt (and how to fix): [11:09]–[13:31]
• Next year’s prevention plan: [14:05]–[15:45]
• Best quote—on proactivity vs. reactivity: [16:49]

Final Thoughts

Austin and Robert blend tough-love encouragement with proven strategies, reminding listeners that it’s not enough to fix last year's mistakes—you must rewire the habits and expectations that landed you in debt. The keys: brutal honesty with yourself, tactical planning, and the discipline to stick to your plan, especially when social and emotional pressures run high.

“Broke people react and wealthy people forecast.” — Robert Croak [16:49]

The holidays should be about joy, not regret. Start now to make next year different.

For more actionable steps and to join the discussion, follow @RichHabitsPodcast on Instagram, or consider joining the Rich Habits Network for weekly live mentoring calls.